Burmese-Thai Border Trade Increases Through Myawaddy

Traders told to prepare for extra competition ahead of the Asean Economic Community in 2015, which will remove tariffs across Southeast Asia.

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By Kyaw Hsu Mon 4 April 2014

MYAWADDY, Karen State — The volume of trade through the busiest crossing on Burma’s border with Thailand is rising, according to the Karen State chief Minister, who predicted an increasing flow of goods as cross-border links improve.

Officials at an Asean Economic Community forum at the border town of Myawaddy on Friday said that total trade through the crossing had risen almost 9 percent during the 2013-14 fiscal year, which ended this week.

“Trade volume through Myawaddy has been increasing annually. There has been little impact from the recent Thai political situation,” Karen State Chief Minister Zaw Min told reporters, referring to the deadlock that has brought the Thai government to a standstill since mass antigovernment demonstrations began late last year.

“Trade will increase more after the construction of the Asian Highway, which runs through Kawkareik and Myawaddy, Karen State, and will link us up to other Asean highways. It will finish next year and trade flows will increase,” Zaw Min said.

Myawaddy, opposite the Thai city of Mae Sot, is the largest of five official checkpoints for overland trade between Burma and Thailand.

The scale of official trade on the Thai border is dwarfed by trade across Burma’s border with China, however. The largest of Burma’s 14 border crossings by trade volume is Muse in northern Shan State, through which 83 percent of total border trade passed in 2013-14, according to figures from the Commerce Ministry.

Total trade across Burma’s borders boomed from US$3.7 billion in 2012-13 to $4.46 billion in 2013-14, with exports making up $2.7 billion of that trade.

According to Ministry of Commerce Director Thaung Naing total trade through Myawaddy was worth US$290 million in 2013-14.

Most of the trade at Myawaddy is goods coming into Burma from more developed Thailand. Thaung Naing said imports represented $240 million of trade, and exports going to Thailand were just $50 million.

Thailand produces similar agricultural products to Burma, so imports less than other neighboring countries.

“This year the total trade volume is $25 million more than last year. This has been the biggest trading year by volume in the last five years,” Thaung Naing told The Irrawaddy.

Imports included foodstuffs, home appliances, construction materials, automobile parts and agricultural equipment, while exports from Burma were mostly marine products, he said.

Official trade, on which the government collects duties, may be rising, but the scale of illegal trade across the long, mountainous border, along which armed groups still control much of the territory, is unknown.

Thaung Naing said part of the increase could be attributed to more effective control of illegal trade. The Ministry of Commerce’s Committee for Controlled Illegal Trade has stepped up its work, and an investigation team has been formed for based in Nyaungkharshay Township, Pegu Division, he said.

“Due to action taken against illegal trade at Myawaddy, the imported trade volume rose significantly,” he said.

With the completion of the new highway to connect Burma with Thailand, and the start of the Asean Economic Community next year—which will see tariff-free trade and freer movement of labor around Southeast Asia—Myawaddy is gearing up to become a major gateway.

“We will not bar any imported products from Thailand next year, so traders need to prepare for serious competition,” Thaung Naing said, naming a concern that has been raised by many in Burma who fear liberalized trade will benefit more advanced regional countries.

“Competitiveness is the main challenge for them. They need to be more organized.”